Aggregate Price Stickiness
نویسندگان
چکیده
We accomplish two tasks to characterize aggregate price stickiness in this paper. First, we endogenize β, the fraction of the firms keeping their price unchanged following a money supply shock in the near-rationality model (Akerlof and Yellen, 1985) by introducing a distribution of price-adjustment barriers among the firms into the near-rationality model. Second, as β can be considered an indicator of aggregate price stickiness by its definition, the endogenized β enables us to characterize aggregate price stickiness by studying
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